What counts as a car sale - transferring ownership of vehicles
In our last newsletter, MBIE highlighted our approach to data matching with the New Zealand Transport Agency (NZTA). As a result of this data matching, individuals and companies trading without a licence are being contacted and asked to meet their obligations. This often means registering as a motor vehicle trader.
This raises an important question: what does being ‘in trade’ actually mean? In some cases, individuals may not realise that their activities could place them within the definition of trading.
If an individual or company holds out (by advertising, stating, notifying, or representing) that they are carrying on the business of trading motor vehicles, they may be required to register as a trader with the Motor Vehicle Traders Register (MVTR). This may apply even if they do not actually trade any vehicles.
Similarly, if an individual or company imports more than three motor vehicles within a 12 month period, they are likely required to register as a motor vehicle trader with the MVTR.
Individuals or companies who advertise to sell, sell, gift, or swap more than six motor vehicles within any 12 consecutive months are also likely required to be registered with the MVTR.
Some people may be unsure whether they have ‘traded’, particularly if they acted on behalf of someone else or did not make a profit from the sale of motor vehicles. In some cases, individuals may simply be fixing up cars to swap, sell for minimal profit or simply trading vehicles. However, these circumstances do not necessarily remove the obligation to register as a motor vehicle trader.
If you are operating under a company that is registered as a motor vehicle trader, ensure that all trades are conducted under the company’s name, or that you are registered in your own right.
It is worth checking your obligations before trading for yourself or on behalf of someone else. Otherwise, you may find yourself being contacted for trading while unregistered.
Once contacted, individuals will be given an opportunity to explain their circumstances or clarify their activity. Understanding your obligations in advance will help ensure you are not taken by surprise by any legal requirements.
The MVTR requires people who are in trade to be registered in order to protect the general public and ensure compliance with the obligations of a motor vehicle trader. If you are unsure whether your activities constitute being in trade, you may wish to seek independent legal advice.